TO: Editors, News Directors

DATE: April 10, 2002

FOR: Immediate Release

Commission Approves La Paz Generating Facility
41 Conditions Address Environmental & Operational Compliance

PHOENIX - In a 2-1 vote Monday, the Arizona Corporation Commission approved La Paz Generating Facility proposed for La Paz County in southwestern Arizona. When completed in 2005, the power plant will be capable of delivering 1,080 megawatts to the power grid. Allegheny Energy Supply, the project developer, expects to begin construction on the $540-million natural gas fired plant later this year.

The plant will include a 100-kilowatt solar array that will augment the project's own electricity use. This is the second merchant power plant that is required to incorporate solar technology as a core part of the total project. Merchant power plants supply power to the wholesale market as opposed to power plants built by a utility with the primary objective of serving its own customers.

The developers had strong support from the communities surrounding the project site, which is in a sparsely populated part of Arizona.

During Monday's meeting, the Commission accepted the 40 restrictions placed on the project by the Arizona Power Plant and Transmission Line Siting Committee.

An amendment from Commission Chairman Bill Mundell changed one of the Siting Committee's conditions dealing with the amount of water the company must purchase and recharge into nearby aquifers. Over the next 30 years, the La Paz Generating Facility will have to recharge 100,000 acre-feet of water through nearby recharge projects or purchase and permanently retire the irrigation rights of existing agricultural lands. At least 50,000 acre-feet of the recharge or irrigation retirement obligation must be made in the first 10 years.

Commissioner Jim Irvin sponsored an amendment that requires the project developer to establish a program with a local community college, labor union or contractor to fill skilled positions for the construction, operation and management of the power plant. All three Commissioners supported the amendment to facilitate safe operations and add job opportunities to a region of Arizona that has seen many businesses, primarily agricultural, leave.

Other Environmental Conditions: Forty conditions were imposed by the Arizona Power Plant and Transmission Line Siting Committee. They include:

• Prior to construction of the facility, Allegheny must provide the Commission with a technical study showing that operation of the plant will not compromise the reliable operation of the interconnected transmission system.

• If upgrades to the transmission system are necessary, the study will have to identify the upgrades to be completed before the project commences commercial operations.

• Groundwater withdrawal is anticipated to be under 6,500 acre-feet per year operating at full capacity but the total annual pumping cannot exceed the amount of water spelled out in Arizona Revised Statute §45-440(A).

• Establishment of a monitoring project for ground subsidence and earth fissures. Subsidence is a potential side effect of groundwater pumping. Cracks, fissures or dips can form in the surface of the earth because the water deep underground that provided physical support is no longer there.

• Before selling power elsewhere, La Paz Generating Station must first offer wholesale power to companies serving power to Arizona users.

• The plant operators must try to use qualified Arizona contractors and encourage the hiring of qualified local employees.

• Allegheny will have to coordinate activities to minimize construction and operational impacts on local wildlife and native vegetation. A biologist and archeologist will monitor all ground clearing and construction activities.

• Other conditions require compliance with air and water quality standards imposed by the Arizona Department of Environmental Quality and the Arizona Department of Water Resources.

Commissioners Jim Irvin and Commissioner Marc Spitzer voted in favor of the project. Chairman Bill Mundell had proposed three amendments seeking to require dry cooling, a technology that would cut the amount of groundwater used at the plant. After all three amendments failed, Chairman Mundell voted against the plant.

For more information about recent power plant sitings, visit the Arizona Corporation Commission's website at http://www.cc.state.az.us/news/index.htm.